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Commentary

Video Matters: For HBO, Story Sells Story

The rapidly changing digital media that have helped create the real-time, rapid-fire rhythms of business information are themselves subject to these truncated narrative cycles. To wit, as soon as
some "conventional wisdom" seems to take hold about the inherent weaknesses of mobile advertising, the supply chain rushes in with examples designed to respond.

One common theme of the holiday
season was mobile’s "sales conversion problem." Smartphones are great for product browsing, on-the-spot research, store finding -- even raising awareness through various ad channels, etc. But
when it comes to making the sale, people tend to feel uncomfortable or blocked on the smaller device and complete the deal elsewhere.

And so right on cue, solutions providers have been trying
to address the conventional wisdom with evidence of customers moving through the purchase funnel predominantly on devices. HBO's home entertainment division last holiday experimented with SessionM's
rewards-based ad platform to move people from ad exposure through to purchase.

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Session's in-app ad model allows users of apps like Sony Crackle, Shazam and the NFL app to opt in to viewing an
ad in exchange for “mPoints” that could be an be redeemed for goods. In this case, users were promoted to opt-in to viewing an ad for HBO’s holiday DVD boxed sets. The subsequent
reward points award could be redeemed on the spot for an HBO gift card and applied to a purchase in the HBO store.

The basic model allowed for the marketer to see a direct correlation between
ad exposure and sales conversion. Typically, SessionM mPoints are accrued for popular general retail gift cards from mass retailers and Amazon. “There are not many advertisers who are in a
position to create a unique reward there,” says Jamil Thompson, associate strategy director at PHD, HBO's ad agency. “But our deal was to take this up a notch and make a direct connection
between the content users engaged with and the reward they would receive.”

But ultimately, when it comes to a property like HBO programming, Thompson says it is the story that sells the
story. “For entertainment advertisers, the ability to convey the story was important.” Getting people to the clips was the most valuable part of the process. “Video assets are
indispensable. A key KPI is video completion. Whether tune-in or DVD sales, the ability to expose the user to a little blip of story arc or sentiment associated with that content nudges them along the
path of consideration.”

Views of the ad could redeem a $5 discount directly in the HBO store. Given HBO's diversity of assets involved in pushing DVD sets,
the targeting could be broad -- adults across a suite of apps from games to entertainment and utility.

The creative-plus-reward formula did, in fact, successfully lure opt-ins.
“Of the 110,000 people given the opportunity to engage, 91% chose to engage with it,” he reports. The video completion rate was extremely high -- 96%. But the surprising metric was
ultimate conversion. About 30% of the people who clicked through to redeem the points with the HBO gift card actually used the card to buy something at HBO. “That is something you won’t
typically see in digital -- 30% conversions,” Thompson says.

Rewarding people for watching your ad has been a longstanding dream of digital media. Since the late 1990s I have covered
countless models for this -- everything from the early browser-based schemes that counted banner ads viewed or clicked to the more robust multimedia destinations of recent years that accrue points for
answering surveys or sitting through videos.

Theoretically, the model always seemed to have promise by making more transparent and consumer-controlled the value exchange that is always
implicit in modern media -- ad exposure underwrites our free or discounted content consumption. But in practice I have always had my doubts about the sustainability of these models. Expecting most
consumers to actively engage in systems of value exchange with advertisers seems to me more of a marketer’s fantasy.

Really? Another rewards program to track? Unless the platform makes
the encounters so seamless, frictionless and in the natural path of content consumption, it was always hard for me to believe that these schemes could achieve scale with a wide enough audience.

But here is the thing about new media platforms and technologies. Not only do these media need to find new and native models for advertising and content, usually after mimicking their predecessors,
but they also will reach back and revive some of the failed experiments from the previous platform to see if they work better in these newer environments. Which is to say that perhaps the “watch
an ad get a prize” model that hobbled through so many iterations on the Web has a more sensible home on mobile devices.

Thompson seems to think this may be the case. “A
seamless and easy-to-activate rewards system works very well with the mobile platform,” he says. And arguably, the app economy -- which uses in-app purchasing anyway -- has a built-in behavior
that is in tune with getting incremental value through certain activities.

But whatever the possible strengths of rewards-based marketing models in the app ecosystem, the value exchange likely
still relies on consumers being rewarded more by experiences than by points. The advertising bargain in the age of mass media has been that we get free media and agree as consumers to sublet our
consciousness (or subconscious) to ad messages. But as that once-implicit bargain becomes more explicit, I presume we become more discriminating about how and when we lease our attention to a marketer
and demand something more than “points.”

It's still about the creative and whether the ad asset being offered is worth watching. Don't show us an ad. Tell us a story.

Steve Smith is the Editorial Director, Events at MediaPost where he oversees all OMMA and Insider Summit event content. He is also the longtime Mobile Insider/MoBlog columnist for Mobile Marketing Daily. A recovering academic who taught media studies at Brown and University of Virginia, he spent the last decade as a digital media critic for numerous publications and as a digital strategy consultant. He also writes for Media Industry Newsletter and eContent magazine. Contact him here.